Benzinga - by Lisa Levin, Benzinga Editor.
Exxon Mobil Corporation (NYSE: XOM) announced a definitive agreement to acquire Pioneer Natural Resources Company (NYSE: PXD) in an all-stock transaction valued at $59.5 billion, or $253 per share.
Under the terms of the deal, Pioneer shareholders will receive 2.3234 shares of ExxonMobil for each Pioneer share at closing. The transaction is expected to close in the first half of 2024.
With the buzz around Exxon Mobil following the acquisition announcement, some investors may be eyeing potential gains from the company’s dividends. As of now, Exxon Mobil offers an annual dividend yield of 3.42%, which is a quarterly dividend amount of 91 cents per share ($3.64 a year).
So, how can investors exploit its dividend yield to pocket a regular $500 monthly?
To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $175,496 or around 1,648 shares. For a more modest $100 per month or $1,200 per year, you would need $35,142 or around 330 shares.
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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend (3.64 in this case). So, $6,000 / 3.64= 1,648 ($500 per month), and $1,200 / 3.64= 330 shares ($100 per month).
Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.
How that works: The dividend yield is computed by dividing the annual dividend payment by the stock's current price.
For example, if a stock pays an annual dividend of $2 and is currently priced at $50, the dividend yield would be 4% ($2/$50). However, if the stock price increases to $60, the dividend yield drops to 3.33% ($2/$60). Conversely, if the stock price falls to $40, the dividend yield rises to 5% ($2/$40).
Similarly, changes in the dividend payment can impact the yield. If a company increases its dividend, the yield will also increase, provided the stock price stays the same. Conversely, if the dividend payment decreases, so will the yield.
XOM Price Action: Shares of Exxon Mobil fell 3.6% to close at $106.49 on Wednesday.
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